Walt Disney has reported a big fall in profits as it continues to suffer from the slowdown in advertising spending.

By any measure, these are challenging times for American business

Michael Eisner, Disney's chairman and chief executive

The company has also seen falling theme park attendances following the 11 September terrorist attacks.

Disney added that it reckoned earnings for the current quarter would be halved because of the current economic climate.

"By any measure, these are challenging times for American
business," said Michael Eisner, Disney's chairman and chief executive.

"However, this environment and its impact on our operating
results will not erode the enduring value of Disney's broad array of assets."

The media and entertainment giant reported earnings of $63m in the three months to the end of September, compared to $348m during the same period last year - a fall of 82%.

Theme parks suffer

Disney has seen the number of people visiting its theme parks fall since September's terrorist attacks.

World Disney World in Florida has suffered in particular as it is heavily dependent on tourism, and the slump in attendances is expected to continue.

"We expect attendance at Walt Disney World in the first
quarter will be down 25 percent versus record setting
attendance a year ago," said Disney chief financial officer Tom Staggs.

Disney has also seen advertising revenues fall at its ABC and ESPN television networks, as companies continue to cut back on promotional spending.

The company has already embarked on a range of cost-cutting measures. Earlier this year it announced it was to cut 4,000 jobs across its workforce.

"Throughout the current downturn we will continue to manage our company in a way that carefully balances the need for near-term cost-reduction with the equally compelling need to invest for future growth," Mr Eisner said in a statement.